Learning from Dubuque, Iowa

I probably should break down and get a snow blower. It takes me between 1.5 and 3 hours to shovel out every time we have a storm.

This is a great story. Dubuque, Iowa (population 57,000) is wooing and close to landing a 1,300 person IBM IT facility. They are offering $52 million in incentives but that is not interesting part. Look at how they approach the issue of workforce availability.

This type of IBM facility could be a game changer for a small city in a relatively small state.

The truth of the matter is that most of the big ICT players in North America from Microsoft to Google to IBM (don’t forget RIM) have been putting large facilities in relatively small markets in recent years. This goes a bit counter to traditional cluster theory but the logic is actually quite simple. These large firms do in effect ‘raid’ top talent from other smaller ICT companies in these communities.

Some people get outraged at the very thought of this but if you think about it carefully you will see that having these large firms actually helps the industry overall and over time. It helps push up wages – which is vital if communities are going to attract ICT workers from outside. It brings more focus to ICT related training at the university and college level. It brings more suppliers. It enhances the community’s reputation. It brings in most cases significant new R&D activity. On and on.

Finally, there is considerable evidence that smaller firms can actually benefit from having the larger ones in the market. Many folks will come to work for the big guy but then be lured away to a smaller firm offering more interesting work or some other incentive that the big firm doesn’t. Some of the smaller ICT firms will actually do work for the big firms.

A healthy ICT industry will have both large and small players. We should learn from the example of Dubuque, Iowa.